how to start in canada?
New to Real Estate · vancouver, bc · Member since 2022 · 9 posts · 1 vote
Hi
is there a similar website for canada ? content seems very focus on the US.
Trying to start but while the reading and the theory is probably ok globally, markets are very different based on location.
I am in BC and debating whether I should invest for my first time in the West or the Maritimes. Trying to figure what tools I could use to make a decision. As I can not buy for my self in vancouver I rather invest elsewhere if that makes sense.
How did you all start ? I feel like I should not ask , nobody is going to reveal their strategy ha ha.
cheers
Get 30-60k capital.
Get approved by a bank for 150-300k purchase in inland Canadian cities.
Pick a few random 100-300k population cities to research rents and purchase prices.
Spend a few months studying real estate and your picked markets.
Find a property for the 1% rule as a quick guide.
Buy the property, rent it out.
Repeat every x years for a stable portfolio increase.
Vancouver is a cashflow negative market, but very high appreciation.
Inland cities are cashflow positive, but low, negative or flat appreciation.
Goodluck
I'm in Canada and have places in BC and AB. First thing is you need to know how much you can borrow and what that would buy you in the two areas.
My first place in BC was a rental I bought while in grad school that I was living in and then rented out when I left. I tried to sell, but the market wasn't great. Turned out well in the end as I had a good tenant in there most of the time (13 years) and the market went way up.
The other places I bought as I want to retire there and the market is very different than where I currently live. Prices in the retirement area (Vancouver Is) have gone up while those in AB where I am hadn't changed much since 2007-2008.
Then when I had saved up enough to buy another rental, the prices on the island were way too high, so I bought locally and have higher cash flow.
Get 30-60k capital.
Get approved by a bank for 150-300k purchase in inland Canadian cities.
Pick a few random 100-300k population cities to research rents and purchase prices.
Spend a few months studying real estate and your picked markets.
Find a property for the 1% rule as a quick guide.
Buy the property, rent it out.
Repeat every x years for a stable portfolio increase.
Vancouver is a cashflow negative market, but very high appreciation.
Inland cities are cashflow positive, but low, negative or flat appreciation.
Goodluck
Alberta has been a great place for landlords to begin their journey with more favourable laws and a lower cost of entry. Central Alberta is even better with some of the most affordable housing in the country (without being hours from a major city). As mentioned, study, study, study. That will never fail you, even if you seem to "miss out" in the mean time. You will be much more prepared to spot and engage in an opportunity that yields much higher results by preparing. Seeing opportunities pass by can feel uncomfortable, but jumping on them without being prepared is much much worse. I can attest to that more times that I'd like to admit. And keep in mind, opportunities are limitless so just learn and search for the next one. Send me a DM if you'd like to chat about the markets out here!
@Nicolas Houillon Wholesaling, flipping, BRRR, buy and hold, owner financing and lease options all work pretty much exactly the same way here as they do in the states.
I specialize in lease options and owner financing. Let me know if you're interested in those. Also I don't do deals in the West or the Maritimes so not worries about competition.
Get 30-60k capital.
Get approved by a bank for 150-300k purchase in inland Canadian cities.
Pick a few random 100-300k population cities to research rents and purchase prices.
Spend a few months studying real estate and your picked markets.
Find a property for the 1% rule as a quick guide.
Buy the property, rent it out.
Repeat every x years for a stable portfolio increase.
Vancouver is a cashflow negative market, but very high appreciation.
Inland cities are cashflow positive, but low, negative or flat appreciation.
Goodluck
Thank you @Maksu Ize ,
I like this descriptive approach, almost like a recipe to apply, but practice and maybe some failures will only provide results.
I ve got the point 1 and 2 ( pre approved for 400k for investment, although I dont want to use ot all) .
point 3-4 :
looks like I need to do some research about locations.
I was thinking using statistic canada or cmhc websites to get some reports and analysis .
I dont know if that's a good approach.
I think I have either the main cities in NB or a few town on Vancouver Island to start with .
Alberta has been a great place for landlords to begin their journey with more favourable laws and a lower cost of entry. Central Alberta is even better with some of the most affordable housing in the country (without being hours from a major city). As mentioned, study, study, study. That will never fail you, even if you seem to "miss out" in the mean time. You will be much more prepared to spot and engage in an opportunity that yields much higher results by preparing. Seeing opportunities pass by can feel uncomfortable, but jumping on them without being prepared is much much worse. I can attest to that more times that I'd like to admit. And keep in mind, opportunities are limitless so just learn and search for the next one. Send me a DM if you'd like to chat about the markets out here!
Love the mindset here @Ken Didychuk "opportunities are limitless" . I am a believer in learn through failures , have missed a bunch of opportunities ( not as REI but primary residence), and agree on spending time researching. Although now I am trying to find the right way to study more, there must be statistic or so to study to have numbers make sense .
For now focusing on BC or maybe NB , but I do not discard AB for sure, like many I looked into Calgary last year :) .
I should reach out to know more about the inland market though , thank you
Edit: sorry at mention do not seem to work
Alberta has been a great place for landlords to begin their journey with more favourable laws and a lower cost of entry. Central Alberta is even better with some of the most affordable housing in the country (without being hours from a major city). As mentioned, study, study, study. That will never fail you, even if you seem to "miss out" in the mean time. You will be much more prepared to spot and engage in an opportunity that yields much higher results by preparing. Seeing opportunities pass by can feel uncomfortable, but jumping on them without being prepared is much much worse. I can attest to that more times that I'd like to admit. And keep in mind, opportunities are limitless so just learn and search for the next one. Send me a DM if you'd like to chat about the markets out here!
Love the mindset here @Ken Didychuk "opportunities are limitless" . I am a believer in learn through failures , have missed a bunch of opportunities ( not as REI but primary residence), and agree on spending time researching. Although now I am trying to find the right way to study more, there must be statistic or so to study to have numbers make sense .
For now focusing on BC or maybe NB , but I do not discard AB for sure, like many I looked into Calgary last year :) .
I should reach out to know more about the inland market though , thank you
Edit: sorry at mention do not seem to work
Also be aware of other costs. In BC you have a property transfer tax which is not insignificant. Also look up rental rules. BC has a cap on annual rent increases.
Alberta has been a great place for landlords to begin their journey with more favourable laws and a lower cost of entry. Central Alberta is even better with some of the most affordable housing in the country (without being hours from a major city). As mentioned, study, study, study. That will never fail you, even if you seem to "miss out" in the mean time. You will be much more prepared to spot and engage in an opportunity that yields much higher results by preparing. Seeing opportunities pass by can feel uncomfortable, but jumping on them without being prepared is much much worse. I can attest to that more times that I'd like to admit. And keep in mind, opportunities are limitless so just learn and search for the next one. Send me a DM if you'd like to chat about the markets out here!
Love the mindset here @Ken Didychuk "opportunities are limitless" . I am a believer in learn through failures , have missed a bunch of opportunities ( not as REI but primary residence), and agree on spending time researching. Although now I am trying to find the right way to study more, there must be statistic or so to study to have numbers make sense .
For now focusing on BC or maybe NB , but I do not discard AB for sure, like many I looked into Calgary last year :) .
I should reach out to know more about the inland market though , thank you
Edit: sorry at mention do not seem to work
Hi Nicolas,
As others said the first thing is to talk to a bank or mortgage broker (I recommend an investor focused mortgage broker) and find out how much you can borrow. Once you have an idea of your budget start to research which market you want to invest in. You are in a strong appreciation market with usually negative cashflow. There is something to be said for investing in your backyard as a first property however in your case you might have the right idea to look outside as especially the first property I think it should be focused on strong positive cashflow. It's a much safer investment that will let you sleep at night and set you up for the next one. I am not super familiar with interior BC but I know that Alberta and Saskatchewan for example have a lot of those opportunities. If you are interested in the Calgary region especially let me know and we can chat, that's my backyard. Good luck in your journey and don't feel bad asking questions, we have all been where you are at some point!
Thanks all for valuable insights and recommendations so far.
I have a follow up questions about 'low income housing' investment (in canada) .
I found a potential property and just learned it is considered a low-income property.
Pros that comes to mind: more affordable for me to buy and get in the market, should never really be vacant.
Cons: rent is lower than another place maybe, does low-income have a negative connotation ?
Anyone with experience in that kind of market ?
Where is the property located? Lots of experience with low income housing.
courtenay, bc
Is it in a low-income neighbourhood - not a lot of those in Courtenay - or is it a low-income building? A strategy many have used, including me, is to buy the worst property on the block and improve it up to average. When you're done, it's no longer low-income. That's not such a good approach if the whole neighbourhood is low income.
Nicolas, I highly recommend checking out The Real Estate Investment Network. It is entirely Canadian and Canadian focused, although some in the group are expanding to US markets. Monthly virtual meetings, and much more. I am a member, it is 100% worth checking out. https://reincanada.com/
P.S. I am from Courtenay, my wife is a realtor.
Sean
Nicolas, I highly recommend checking out The Real Estate Investment Network. It is entirely Canadian and Canadian focused, although some in the group are expanding to US markets. Monthly virtual meetings, and much more. I am a member, it is 100% worth checking out. https://reincanada.com/
P.S. I am from Courtenay, my wife is a realtor.
Sean
Thank you @Sean McLean. I ll try to reach out .
HI @Nicolas Houillon, there is the REITE club in Canada, which is a pale comparison to the BP forums - it's not very active. There's a podcast of the same name which I followed for a few months, but's it's not very good, either. The canuck community is actually pretty active here on BP, and I saw a post about reviving a Canadians-specific forum soon.
There are a few things you should consider as you're getting started. First, continue learning as much as you can until you overcome the shiny-object phase. I'm sure most people go through that phase in the beginning when every new REI strategy seems like a great idea worth pursuing, but you'll eventually lean towards one or two that suit your personality the most. There are 3 or 4 main books in the BP store worth buying to build a solid foundation of knowledge, and there are often discount codes if you listen to their podcasts, which I also highly recommend. You'll figure out soon enough what things don't apply to Canada - there aren't many, actually, but they get discussed a lot (eg, VA loans, 1031 exchanges).
As you're learning, share your thoughts and intentions with the people around you and on the BP forums. This reinforces your knowledge and goals, and will reduce your fear of taking action. However, don't rush in because of FOMO. You'll hear a lot of stories of people who jumped in unprepared and struggled and yet still succeeded, so you might be tempted to believe the same will happen to you. The BP forums has a natural 'success bias', meaning the only people who stay on here are the ones who have achieved some degree of success in the REI game. We'll never know about the multitudes of people who tried and failed, because they don't contribute to the forum. I'm guessing there a lot, lot more who gave up than those who succeeded. So why not take the time to learn from other people's mistakes and successes to increase your own chances for success.
I'm pretty sure the phrase 'time in the market vs timing the market' is meant to inspire people to take action if they're delaying and looking for the 'perfect' deal. I don't think it's meant to encourage people to go in unprepared. The more you learn, the more you'll realize that having an abundance mindset will be of more benefit than having a scarcity mindset. In theory, REI is a zero-sum game, because if everyone is a landlord, then there'd be no renters. But in reality, only a small percentage of people are willing and able to play the game, so there's enough to go around and there's no need to rush.
Second, the ongoing cashflow vs appreciation question/debate is, well, puzzling, because I think it's pretty much been settled by David Greene, the host of the BP podcast. That question seems to come up every few shows, and his answer is pretty much the same every time. The answer: every property should cashflow, but how much cashflow you need depends on what your portfolio looks like. As you start investing, you'll need higher cashflow to cover unexpected expenses and to buy the next property. And if you plan to rely on cashflow to replace your job, then you'll need more cashflowing properties. However, appreciation is where the real wealth is created, and there are many ways to 'force' appreciation. So as your portfolio grows, you can start adding properties in higher appreciation (lower cashflow) areas because the income from several properties can more easily cover unexpected costs in any one of them. Cashflow and appreciation are a continuum, and you have to choose where you want to be on it at your stage of investing. Some people are perfectly happy with one or two rental properties nearby that they can manage themselves. Others want to invest all over the world.
One great thing about investing in Canada is that there's lots of free data to help you decide where to invest. I've used the StatsCan and CMHC sites a lot, as well as the CREA site, Zillow and Redfin. The 3 factors David Greene suggests to look at (and I agree) are population & employment growth, and land availability. If the first two are growing and land is limited, then that's good for appreciation. If the first two are stable or increasing gradually, then that's likely good for rentals. He also suggests buying the worst property in the best area you can afford, and fix it up to get the maximum return on our investment.
After digging into the 4 big Canadian metros, see my post here Investing in Calgary (biggerpockets.com), I was surprised that Calgary is so popular with investors. The main draw is the landlord friendly regulation. Its population is growing, but it's the only big economy with unemployment trending up. Plus, there's pretty much unlimited land. The economy is more cyclical and is too reliant on oil & gas, and the clock is ticking for that industry. We'll certainly need increasing amounts of O&G in the next decade, maybe two, to build the infrastructure for the post O&G world, but beyond that there's going to be a pretty drastic drop in demand. Will business friendly government be enough to overcome that decline? I doubt it. Certainly, a lot of investors are successful in areas that most people avoid. 'Be a big fish in a small pond', or 'be greedy where others are fearful' and all that. Oh yeah, that's another thing David says to check, whether an economy is dependent on one company or industry.
Finally, I'm a big proponent of house hacking, especially since you live in Vancouver. I would suggest starting with that before looking elsewhere, because again, appreciation is the best way to grow your wealth. See my post here Post: Seeking Advice On How To Achieve My REI Goal (biggerpockets.com)